Jose Gonzalez-Campelo/The Cougar
Editor’s Note: This article has been updated to include up-to-date information.
UH has paused all new capital construction projects and enhanced its safety and security initiatives in response to growing financial uncertainty at the state and federal levels.
“UH operates within a financial structure that is influenced by both state and federal funding decisions,” said associate vice chancellor and associate vice president for media relations Shawn Lindsey.
A key concern for UH is the potential removal of the Institutional Enhancement Fund, which has historically provided approximately $50 million over two years. The state-issued fund supports critical student services, including academic advising, financial aid and high-demand academic programs, Lindsey said.
At the federal level, proposed budget resolutions for Fiscal Year 2025 include reductions to higher education funding. Changes in research funding policies such as a cap on indirect cost rates for National Institutes of Health grants could significantly impact UH’s research portfolio.
The University expects to incur losses related to the cap, with additional cuts anticipated across other research agencies.
The Trump administration’s proposed restructuring of the Department of Education could further affect UH by altering funding streams and increasing regulatory uncertainty.
“At this stage, it would be speculative to predict the full impact,” Lindsey said. “The Trump administration has stated that federal financial aid funding will not be affected. We continue to monitor developments closely and advocate for policies that support our students’ access to affordable education.”
UH says it would remain committed to academic freedom should federal funding be cut due to concerns about “critical race theory” or “transgender ideologies,” as cited by President Trump.
“As a state agency, we are required to adhere to state and federal laws while upholding our mission to provide a supportive environment for all students,” Lindsey said. “We will continue to monitor federal policies and determine appropriate responses.”
On Mar. 11, 2025, UH President Renu Khator announced the decision to pause new capital construction projects in an email to faculty and staff. The Centennial Campus Enhancement Project will be paused for three months or until May 31.
“You are probably aware of many changes taking place at the federal and state levels that directly impacted the financial landscape of higher education,” Khator said. “Budgetary pressures compiled from all directions, whether from the reduction in federal grant funding, the freeze on institutional enhancement funding or the Texas House settlement regarding Name, Image and Likeness. What we know at this point is only overshadowed by what we do not know.”
Projects funded by donors or the legislature through capital construction funds are exempt from the pause.
Other exemptions include the Campus Lighting and Security Enhancement Project, Wilhelmina’s Grove Improvements, the Hobby School of Public Affairs Academic Building and the renovation of Agnes Arnold Hall.
Projects already under construction will proceed as scheduled, Khator said.
In February, the Trump administration announced steep cuts to NIH grants, potentially reducing university research funding by more than $100 million.
The administration also vowed to pull federal money from colleges opposing its agenda on issues such as diversity, equity and inclusion programs, transgender athletes’ participation in women’s sports and student protests.
With the Federal Student Aid Office and the Office for Civil Rights being among the hardest hit by recent cuts, UH said it remains committed to upholding student protections and financial aid.
“Our financial aid office continues to provide guidance and resources to students navigating the federal aid process,” Lindsey said. “Our Office of Equal Opportunity Services ensures compliance with federal and state limitations related to civil rights protections.”
UH officials said the University is also actively evaluating contingency strategies to ensure continued support for students.
“We cannot predict every policy change, but we are prepared to adapt to different funding scenarios to minimize disruption to student aid and essential services,” Lindsey said.
The University also maintains an active presence in Houston, Austin and Washington, D.C., through its Office of Government and Community Relations.
“Our representatives engage with lawmakers to advocate for policies that support higher education, research funding and student financial aid,” Lindsey said. “Our goal is to secure the necessary resources to provide a high-quality education while keeping tuition as affordable as possible for our students.”
Despite financial concerns, state officials remain optimistic about Texas’ economic trajectory.
“Texas continues to outpace the nation in economic growth, adding more jobs than any other state in the nation,” Gov. Greg Abbott said. “We will continue to expand job growth through our business-friendly policies, low taxes and strategic investments in innovation and education.”
